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Savigny was born at Frankfurt, of a family recorded in the history of Lorraine, deriving its name from the castle of Savigny near Charmes in the valley of the Moselle. Left an orphan at the age of 13, Savigny was brought up by a guardian until, in 1795, he entered the University of Marburg, where, though in poor health, he studied under Professors Anton Bauer and Philipp Friedrich Weiss, the former a pioneer in the reform of the German criminal law, the latter distinguished for his knowledge of medieval jurisprudence. After the fashion of German students, Savigny visited several universities, notably Jena, Leipzig and Halle; and returning to Marburg, took his doctor's degree in 1800. At Marburg he lectured as Privatdozent on criminal law and the Pandects.

In 1803 Savigny published Das Recht des Besitzes ("The law of possession"). Thibaut hailed it as a masterpiece which brought the old uncritical study of Roman law to an end. It quickly obtained a European reputation, and still remains a prominent landmark in the history of jurisprudence. In 1804 he married Kunigunde Brentano, the sister of Bettina von Arnim and Clemens Brentano the poet. The same year he embarked on an extensive tour through France and south Germany in search of fresh sources of Roman law.

In 1808 Savigny was appointed full professor of Roman law at Landshut. He remained in this position for a year and a half. In 1810 he was appointed to the chair of Roman law at the new University of Berlin, chiefly at the instance of Wilhelm von Humboldt. Here, in connection with the faculty of law, he created a "Spruch-Collegium", an extraordinary tribunal competent to deliver opinions on cases remitted to it by the ordinary courts; and he took an active part in its labours. This was the busiest time of his life. He was engaged in lecturing, in the government of the university (of which he was the third rector), and as tutor to the crown prince in Roman, criminal and Prussian law. During his time in Berlin Savigny befriended Niebuhr and Eichhorn.

In 1814 Savigny wrote the pamphlet Vom Beruf unserer Zeit für Gesetzgebung und Rechtswissenschaft. In an earlier pamphlet Thibaut had argued for the creation of a unified legal code for Germany, independent of the influence of foreign legal systems. Savigny argued that such a codification of the law would have an adverse effect. According to Savigny the damage which had been caused by the neglect of former generations of jurists could not be quickly repaired, and more time was required to set the house in order. Moreover, a unified legal code would almost certainly be influenced by natural law, with its "infinite arrogance" and its "shallow philosophy". It was Savigny's opinion that jurisprudence should be saved from the hollow abstractions of such a work as the Institutiones juris naturae et gentium of Christian Wolff. Savigny opposed this conception of jurisprudence to the historical study of the positive law, which, according to him, is a condition precedent to the right understanding of the science of all law. However, Savigny did not oppose to the introduction of new laws or of a new system of laws.

The same year, Savigny published the first volume of his Geschichte des römischen Rechts im Mittelalter ("History of Roman Law in the Middle Ages"), the last of which did not appear until 1831. He had been prompted to write this work by his early instructor Weiss. Savigny intended it to be a literary history of Roman law from Irnerius to the present time. His design was in some respect narrowed; in others it was widened. He did not continue the narrative beyond the 16th century, when the separation of nationalities disturbed the foundations of the science of law. In the first volume, Savigny treated the history of Roman law from the breaking up of the empire until the beginning of the 12th century. According to Savigny, Roman law, although considered dead, lived on in local customs, in towns, in ecclesiastical doctrines and school teachings, until it once again reappeared in Bologna and other Italian cities.

In 1817 Savigny was appointed a member of the commission for organizing the Prussian provincial estates, and also a member of the department of justice in the Staatsrath ("State council"). In 1819 he became a member of the supreme court of appeal for the Rhine Provinces. In 1820 he was made a member of the commission for revising the Prussian code. In 1822 he was afflicted with nervous illness, which compelled him to seek relief in travel. In 1835 Savigny began his elaborate work on contemporary Roman law, System des heutigen römischen Rechts (8 vols., 1840–1849). His activity as professor ceased in March 1842, when he was appointed "Grosskanzler" (High Chancellor), the official at the head of the juridical system in Prussia. In this position he carried out several important law reforms in regard to bills of exchange and divorce. He held the office until 1848, when he resigned.

In 1850, on the occasion of the jubilee of obtaining his doctor's degree, appeared in five volumes his Vermischte Schriften, consisting of a collection of minor works published between 1800 and 1844. Savigny was hailed throughout Germany as "the great master" and founder of modern jurisprudence. In 1851 and 1853 he published the two volumes of his treatise on the law of obligations, (Das Obligationenrecht), mostly on what English-speaking lawyers consider in contract law. It was a supplement to his work on modern Roman law, in which he again argued for the necessity of the historical treatment of law.

Savigny died at Berlin. His son, Karl Friedrich von Savigny (1814–1875), was Prussian minister of foreign affairs in 1849. He represented Prussia in important diplomatic transactions, especially in 1866.

Savigny belongs to the German historical school of jurists, founded by Gustav Hugo, and served a role in its consolidation. The works for which Savigny is best known are the Recht des Besitzes and the Beruf unserer Zeit für Gesetzgebung. According to Jhering "with the Recht des Besitzes the juridical method of the Romans was regained, and modern jurisprudence born." It was seen as a great advance both in results and method, and rendered obsolete a large body of literature. Savigny argued that in Roman law possession had always reference to "usucapion" or to "interdicts". It did not include a right to continuance in possession but only to immunity from interference as possession is based on the consciousness of unlimited power. These and other propositions were derived by the interpretation and harmonization of the Roman jurists. However, many of Savigny's conclusions did not meet with universal acclaim. They were opposed by, among others, Jhering, Gans, and Bruns.

Savigny argued in the Beruf unserer Zeit that law is part and parcel of national life. He opposed the idea, common to French 18th century jurists and Bentham, that law can be arbitrarily imposed on a country irrespective of its state of civilization and history. Another important idea of Savigny is that the practice and theory of jurisprudence cannot be divorced without injury to both.

Berkowitz, Roger (2005), "From Science to Technique: Friedrich Carl von Savigny, the BGB, and the Self-Overcoming of Legal Science", The Gift of Science: Leibniz and the Modern Legal Tradition, Cambridge: Harvard University Press, ISBN0-674-01873-7.